Analysis of Nespresso's targets

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Analysis of Nespresso's targets

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Abstract

Nestle was built in 1866 by Henri Nestle, a pharmacist who developed baby food for babies who did not get their mother's milk.

Nestle doubled its size during World War I.
In the 1920s, Nestle expanded its range of products like chocolate that became its second activity after milk.

Nestle profits dropped down during due to effects of World War II. In 1947, Nestle had a dynamic phase with acquired companies like Findus and L'Oreal.

In the 1990s, Nestle continued acquiring companies like San Pellegrino and others.
Today, Nestle is one of the most important groups for food sales.

STEP Analysis
1. Socio-cultural
2. Technological
3. Economic / competitive
4. Political
Segmentation Strategies
1. Geodemographic segmentation
2. Psychographic segmentation
3. Behaviour segmentation
4. Segmentation analysis
Recommendations

Extract

[...] Geo-demographic segmentation Geo-demographic is analysis of people according to where they live'. When we look at the Nespresso Geographic and Demographic segmentation we can see two different targets aged between 28-49. They are single people and families. Geographically speaking, they live in beautiful districts of large cities. We can deduce this aspect because Nespresso ‘boutiques' are situated in these districts and the costs of capsules and machines are quite expensive. Demographically speaking, the targets are women or mothers because they usually drink a lot of coffee and do the house hold shopping. [...]

[...] These Limited Editions are meant for the club members of the Group and to attract new customers. Nespresso capsules sales continue to increase every year. (Nespresso UK) Nespresso did not only use the Limited Editions to increase its club members or their new consumers. To have an espresso, you need to have a Nespresso machine. The company has designed a wide range of machines, in 2006 nineteen different kinds of machines were available, twelve of these are distributed by Nespresso and the rest are distributed by big manufacturers like Krups and Magimix. [...]

[...] Nespresso is looking for heavy users (family) who drink a lot of coffee, this will contribute great sales to the company (Learn Marketing UK). But the company is being copied by a lot of companies. All the advertisements show beautiful girls having a good time drinking creamy coffee and this is what consumers expect about a good espresso. The company will be able to maintain its position as the leader if it continues the development of new tastes and design of machines. [...]

[...] Christmas is the most important time of sales for machines, during this period the company offers vouchers for free capsules when you buy a machine. (Com.in magazine, article 03/2006) (Hollywood TV) (Coffee House, article 03/2006) (Journal du net, article 20/09/2006) c. Economic/competitive The market of coffee capsules is growing each year. Nespresso is one of the fastest increasing businesses of the Nestle Group, reporting a growth of 36% for last year, and more than 30% during the last five years (see graph page 5). [...]

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